Upsides talks to bankers from around the world. Why did they start working in the financial sector? What does the financial landscape look like in their country? And how does this landscape influence their actions?
In 2013, the MFI sector in Cambodia was one of the best performing globally, delivering high returns and high growth. How would you explain such a success?
‘I think that the success stems from many factors. First the government’s and the central bank’s support for microfinance activities, second the belief of lenders and funders in the microfinance sector and third our clients. As you may know microfinance started some 15, 20 years ago so our clients have experience and know how to use debts and manage their assets. The Cambodian economy and political stability are also favourable factors to our success. Cambodia benefits from a high growth rate, which is currently between 7 and 8%, and from a top down standpoint. For instance, the management and institutional infrastructures in place with internal audit and control allow us to grow.’
How do you think the MFI sector in Asia will evolve in the long term?
‘We see a growing interest in microfinance across Asia and in most countries it has become one of the tools that contribute to development. I expect that it will expand further in the region. I think that especially in Cambodia, microfinance is moving in the right direction because of the good regulations and the experience and commitment of all stakeholders: government, shareholders and management. For Cambodians microfinance will go up a notch, by offering services that go beyond it such as credit transfers. ‘
Where do you see Prasac in five years? What is Prasac’s ambition?
‘I foresee us moving up to the higher market, touching the small and medium sized enterprise segment, and diversifying our products and services not only for existing but also for new clients. We will of course focus on microfinance activities, but I think that as a microfinance institution we won’t be that different from a bank.’
What does good corporate governance mean to you?
‘I think corporate governance is very important. Without it, we would not be able to grow and sustain our current level of performance. It is very important for us to have a system of checks and balances, to have internal controls in place, otherwise we simply cannot grow and expand our operations. Having proper and good corporate governance in place is also an important factor in client trust and overall public confidence.’
Prasac enjoys a positive reputation in the market, outstanding financial performance and was recently awarded three MFI Awards. What is the secret to your tremendous success?
‘That is a tough question. I think the secret is that everyone in the company is focused on servicing the client, we strive to inspire staff to provide good service to clients and to do their best. However, our success does not only come from clients but also from stakeholders, shareholders that support our strategy and provide guidance. The management of staff, the embassies’ support, and our good relationship with our financiers for the past few years have also been a big factor.’
What challenges do you encounter as an MFI in such a competitive market?
‘Currently seven microfinance institutions share 90 to 95% of the market. Competition is tough, but that’s a good thing because it means we constantly need to improve ourselves and be the best. While most of our competitors are quite small and lack capacity to grow from a technical and financial perspective, we still grow and gain competitive advantage as the demand in the market increases. Because we have the second largest office network in the country and more staff with client relations expertise, we are able to meet client preferences and demands.’